With the launch of the UK government’s information campaign urging businesses to prepare for the Brexit transition next year, significant changes and opportunities can be expected.
One key issue in a post-Brexit world, will be the risks of border crossing delays between the United Kingdom and the EU. Businesses, according to Tom Holland, Territory Sales Manager, UK and Ireland at Sigfox, need to act now to prepare and to strengthen supply chain visibility.
On 1 January 2021, the UK will have a new relationship with the EU and with the clock running down, the most likely outcome is that the UK will not enter into a new free trade arrangement with the EU.
“The UK is already behind in its preparations and this is where greater visibility of the supply chain is a must to ensure a smoother transition,” explains Holland.
Critics of the UK government suggest that it has been showing ‘wilful ignorance’ and is ill-prepared to operate a functioning customs border.
“We didn’t have enough time to put in place the infrastructure, people, and systems we needed before COVID-19 [and] we certainly don’t now,” said one.
So new trade barriers are likely and for businesses this will present a number of new challenges.
“Those barriers could take many forms, such as divergence of regulations, introduction of tariffs, or goods quotas. What is clear is that with the introduction of new trade barriers, the risk of delays in moving goods across the border in either direction increases significantly,” says Holland.
The impact of border crossing delays will vary from industry to industry. Industries that utilise just-in-time manufacturing processes, and industries that trade in perishable goods such as food and medicine, are likely to feel the effects of border crossing delays more than most.
The options available to businesses will depend on the type of cross-border trade, according to Holland. “How can they prepare for those delays? Invest in new facilities to stockpile? Plan alternative supply routes if primary routes become congested? Identify possible local supply
alternatives? Renegotiate contracts to make special provisions for border delays? Build contingencies into to the supply chain?”
What cuts through all of those options is a need for greater visibility and greater access to data. To mitigate border crossing delays, businesses need real time visibility of those delays to inform their contingency plans.
“Lack of end-to-end visibility of the supply chain is not just a Brexit issue though; it is arguably the greatest challenge facing enterprise supply chains in 2020,” says Holland. “We need to move to an efficient and optimised, data-driven approach, when it comes to trade.”
Can the IoT help?
The Internet of Things (IoT) has the unique ability to capture vast amounts of extremely valuable data, helping businesses better understand the behaviour of people, environments and assets to give a real-time holistic view of the entire supply network says Holland.
“By implementing connected devices across the supply chain, businesses could gain a vast array of data that not only can give them real-time data on border crossing delays and the impact to the supply chain, but could fulfil regulatory requirements, and offer granular insights into the efficiency and real time operation of their networks.
“The possibilities with regards to the data that IoT can extract are vast; businesses can gain additional data and insight of routes travelled, warehouse delays, monitoring of goods in transit, and even the ability to expedite customs requirements by verifying the provenance and authenticity of goods, or by confirming that a container hasn’t been opened or modified from the time it was packed.”
According to Holland, customers are already reaping the benefits of the IoT and the connectivity provided by platforms like Sigfox.
“For example, real-time alerts about delays and transport conditions has enabled Michelin to reduce transit stock by 10%, increase Estimated Time of Arrival (ETA) by 40% and reduce Out of Stock (OOS) situations due to exceptional circumstances by a quarter.
“We are seeing increasing interest across geographical locations, including the UK, via our secure sensor network operator, WND UK. We are also seeing an upsurge of demand across Europe, especially among those nations trading with the UK.”
This tide of innovation is beginning to deliver measurable results, suggests Holland.
“Deutsche Post DHL Group has outfitted about 250,000 DHL roll cages with Sigfox smart trackers giving it powerful levels of visibility of the essential and valuable roll cages which are used to transport large volumes of parcels.”
The IoT is gradually beginning to transform and digitise the global supply chain, providing companies with unprecedented visibility into their own operations.
“The accelerating pace of change, and the uncertainty and potential disruption to cross border supply chains that Brexit may bring, means that businesses will increasingly need to be on-board, and up-to-speed in order to maintain competitive advantage,” says Holland.
“Just a few years ago, full supply chain visibility was just a pipedream – now it is a rapidly approaching business fact.”